Movado Group Is Running Like a Finely Tuned Watch

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Movado Group (NYSE: MOV) announced stellar fiscal first-quarter 2019 results on Wednesday morning, highlighting broad-based geographic strength as consumers continue to embrace the Swiss watchmaker's wares. Movado also boosted its full-year guidance, leaving shares up more than 16% in today's early trading.

Let's take some time, then, to better understand what drove Movado over the past few months, and what investors should be watching in the coming quarters.

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Movado Group results: The raw numbers

Metric

Fiscal Q1 2019*

Fiscal Q1 2018

Year-Over-Year Growth

Revenue

$127.1 million

$99.3 million

28.1%

GAAP net income (loss)

$8.1 million

($4.2 million)

N/A

GAAP earnings (loss) per share

$0.35

($0.18)

N/A

What happened with Movado this quarter?

  • On an adjusted (non-GAAP) basis, which notably excludes acquisition expenses, earnings were $8.7 million, or $0.37 per diluted share.
  • Movado's sales grew 22.2% on a constant currency basis.
  • The top line also included $2.2 million in sales related to the adoption of new accounting standards at the start of the fiscal year, namely from a slight timing shift between quarters for recognition of expected returns and markdowns.
  • Still, these results handily beat consensus expectations for earnings of $0.11 per share on revenue of $109.5 million.
  • Movado repurchased 30,500 shares this quarter, leaving $46.8 million remaining under the company's $50 million share-repurchase authorization.

What management had to say

Movado chairman and CEO Efraim Grinberg called it a "strong start to the year," crediting the company's "powerful portfolio of owned and licensed brands." The latter notably includes last year's roughly $78 million acquisition of Olivia Burton parent JLB Brands.

Grinberg elaborated in a press release:

Looking forward

More specifically, Movado increased both ends of its previous full fiscal-year 2019 revenue outlook by $10 million, for a new expected range of $615 million to $625 million. Movado also anticipates operating income for the year in the range of $71 million to $73 million, and net income of $2.35 to $2.40 per diluted share. By contrast, most investors were only anticipating full fiscal-year earnings of $2.23 per share on revenue of $608.9 million.

All things considered, there was nothing not to like about this stellar quarter from Movado Group, especially given the increasingly crowded market for wearable technology. Even with Movado shares having nearly doubled in the year leading up to this report, it's no surprise that bullish investors are cheering once again today.

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Steve Symington has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.